Taxing water an issue for us all

10 Aug 2017

NZ First want a bottled water tax, and Labour want to tax primary producers as well as water bottlers. Labour’s stated aim is to clean up our water ways. But there are no details about how, with the policy to be worked out in the first 100 days if they are elected to govern New Zealand; commenting on a policy yet to be developed is like walking on quick sand. The industry stands ready to sit down with whoever is elected to govern New Zealand to develop all relevant policies, particularly policies that seek to tax the primary sector. So here are a couple pointers for developing a water tax policy.

The first is that every tax has consequences. If a grower has to pay a tax for water use, that cost will end being paid by the consumers who buy their fruit and vegetables. This is because horticulture businesses already work in highly competitive markets, both in New Zealand and offshore. Healthy food will be more expensive, with the consequence being that fewer people will eat healthy food. One in five New Zealanders already don’t buy fresh fruit and vegetables each week and, if the cost goes up, that will likely increase. With less healthy food being eaten there will be a corresponding increase in health issues, such as obesity, diabetes and heart disease. The health costs for dealing with that will also increase. It’s a knock-on effect; by taxing water for food production, food will cost more and the Government will have to pay a lot more for health care. The simple solution here, of course, is to not tax water used to grow fresh fruit and vegetables.

The second thing to note is the disconnect between water users and the condition of our waterways; just because you use water does not mean that you are damaging our waterways. There are growers who collect rainwater and store it for later use, who have paid for the storage infrastructure and are capturing rain; is rain going to be taxed as well?

The third is that any policy needs to be equitable; industrial users and urban dwellers cannot be excluded. When it comes to causing issues in our waterways, industrial users and urban runoff are major contributors of pollution. There has to be one rule for all. There are farmers and growers who are making incredible efforts to clean up waterways; doesn’t this tax say to them you not being recognised for your good work?

For many years, farmers and growers have been taking actions to clean up our waterways, much of this without Government funding or Regional Council rules. This is because they are caretakers of the land, who want to build a sustainable business for the next generations. What is needed is not a water tax, but support for everyone who is working to clean up our waterways. We ask the next Government to come and work with us, so that we can collectively clean up our waterways. This will not be achieved by a punishment tax.

Let’s work together to continue with, and enhance, the good work already being done.